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E-commerce: If you build it, will they buy?


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The Authority on Data-Driven Engagement & Operations

Unleashing the power of e-commerce ❱ 8

Mio Global founder and CEO Liz Dickinson models her company’s leading-edge heart-rate monitoring fitness watches. A solid e-commerce strategy has empowered this Canadian manufacturer to successfully compete in the global marketplace.

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// 3 Cover Story Vol. 28 | No. 11 | November 2015 EDITOR Sarah O’Connor - sarah@dmn.ca PRESIDENT Steve Lloyd - steve@dmn.ca DESIGN / PRODUCTION Jennifer O'Neill - jennifer@dmn.ca


Unleashing the power of e-commerce

Advertising Sales Mark Henry - mark@dmn.ca CONTRIBUTING WRITERS Bruce MacDonald Paul Austin-Menear Alec Paterson Leigh-Ann Clarke Rob Stocks Steve Falk Gayle Goossen


302-137 Main Street North Markham ON L3P 1Y2 Phone: 905.201.6600 Fax: 905.201.6601 Toll-free: 800.668.1838 home@dmn.ca www.dmn.ca EDITORIAL CONTACT: Direct Marketing is published monthly by Lloydmedia Inc. plus the annual DM Industry Source Book and List of Lists. Direct Marketing may be obtained through paid subscription. Rates: Canada 1 year (12 issues $48) 2 years (24 issues $70) U.S. 1 year (12 issues $60) 2 years (24 issues $100) Direct Marketing is an independently-produced publication not affiliated in any way with any association or organized group nor with any publication produced either in Canada or the United States. Unsolicited manuscripts are welcome. However unused manuscripts will not be returned unless accompanied by sufficient postage. Occasionally Direct Marketing provides its subscriber mailing list to other companies whose product or service may be of value to readers. If you do not want to receive information this way simply send your subscriber mailing label with this notice to: Lloydmedia Inc. 302-137 Main Street North Markham ON L3P 1Y2 Canada. POSTMASTER: Please send all address changes and return all undeliverable copies to: Lloydmedia Inc. 302-137 Main Street North Markham ON L3P 1Y2 Canada Canada Post Canadian Publications Mail Sales Product Agreement No. 40050803


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Targeting & Acquisition ❯❯4

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360° of opportunity: Implementing an holistic approach to media planning E-commerce


Non-profits as leaders in innovation?



If you build it, will they buy?

Operations & Logistics ❯❯10

E-commerce for small growing service businesses


Industry news November 2015

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Targeting & Acquisition

360° of opportunity:

Thomas Königsthal Jr, Kamara

Implementing an holistic approach to media planning

Part three of a media optimization series on consumer profiling, market analysis, planning and measurement.*

By Alec Paterson with Lynne Hoppen

Memo to: CEO From CMO Date: Q3 2015 Subject: Transition Execution Summary In the last quarter, we’ve implemented many innovative consumer media planning systems and best practices. We’ve seen huge gains in our marketing and advertising performance. I’ve outlined our progress below: 1. We’ve reduced our reliance on data service companies We shopped the market to gain a clearer understanding of the data service options available—from hiring a full service data and analytics ❱ DMN.ca

provider to purchasing our own thirdparty data to performing our own analytics. ❯❯ We’ve built internal capability: For several practical reasons— including security—we decided to build our own internal resource. We’ve hired a senior data asset manager to deal with the complexity of merging and managing data. ❯❯ We’ve invested in data analysis software: We sourced powerful software and hardware to facilitate the depth of data analysis required, with accuracy and speed as key criteria. ❯❯ We purchased demographic data: We purchased demographic data from a top Canadian supplier—and merged this data with our own customer, media response, online and POS data.


We partnered with GIS/spatial analytics experts: We expanded our analytical bench strength to address the GIS data and its implementation (including training).

2. We’re using customer profiling/ market segmentation models You remember we used to use a Canadian cluster product to review national sales performance. To no one’s surprise we saw that sales performance varied nationally. To better understand regional and specific variations, we created our own segmentation model. Here’s what we found out: ❯❯ Variations exist by market type within regions: We discovered sales varied regionally in the Atlantic, Quebec, Ontario, Prairies and Pacific—but, more significantly, by




market type within each region. We really have 14 market segments, not 12: Segmenting our data by rural, urban (area with at least 50,000 people) and metropolitan (top six metro areas), we created 14 segments. We can now rank our prospects: When we layered in sales by postal code within the 14 segments— along with the key socioeconomic drivers—we were able to build a ranking method that we call “Prospect Quality Factor” or PQF. And there’s one PQF for every postal code in Canada. Now, we can target any media, for any purpose: We have a dramatically clearer view of potential markets. We are finding new customers in existing store trade areas, we’re prospecting for new customers and November 2015

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Targeting & Acquisition

website a larger priority in all our communications. We’re now getting 15% more traffic and a 10% increase in sales. Mobile: This is weakest link in the execution chain. Our POS systems cannot accept the online barcodes. We are working to link the stores, customer segments, offers and customer location—and integrate customer data and digital marketing in real time. Summary The cooperation required to do all this injected fresh motivation into people who are excited to be working together, smarter. This exercise continues to provide the most unbelievable training for all concerned. Six months in, we’re already reaping the benefits with higher sales and response rates, more revenue per ad dollar, new knowledge and efficiencies everywhere that are driving greater reach.

we’re expanding the chain into new markets. 3. Our customer database is being used company-wide Execution of the enterprise-wide database has been straightforward— likely because all departments have had plenty of input into its design, plus the new database maintained all department-specific data. Everyone is benefiting: ❯❯ All sales, customer and market response data is in one place: Maintenance and support required the addition of the senior manager, a mid-level data specialist and some software development to automate the uploading of sales, customer and marketing response data. ❯❯ Reporting is easily accessible: Reporting wait time has been dramatically reduced. All departments can access pre- or post-program planning and analysis information 24/7. ❯❯ Our marketing programs are generating real, measurable results: Pre-program modeling is now happening to target customers and prospects based on value and objective (e.g. acquisition & retention). Results are coming in tens of percentage points higher already. ❯❯ We’re changing the way we work November 2015

for the better: For example, digital is now using offer and creative pretesting for DM applications. Mobile is taking full advantage of offer response learning, and they’re using GPS-enabled customer data to drive store and online traffic. 4. We’re regularly measuring and analyzing marketing results Our easy-to-use, custom software allows staff and agencies to input data—and this customer data is uploaded to the marketing database daily. Everyone is working off real data, in real time: ❯❯ Everyone can now measure/ analyze data: Dashboards are being designed to deliver key information throughout the company. ❯❯ Profit is now our key analysis metric: We’re delivering better comparative analyses. Profit has replaced sales as an analysis metric in many areas. ❯❯ Cost per acquisition has been introduced: We have clearer performance numbers on all online and offline communication—so we can now compare results across all markets, media and customer segments. 5. Our marketing and media plan optimization efforts continue Flyers: We’ve optimized our flyer

use—and OOH is now about 50% higher because we’re applying customer location data. We’re now taking these optimization efforts to a new level with digital flyers, flyer wraps, custom mini-flyers, addressed flyers and in-paper or ROP flyers. Television: Using the new profiles, TV buys have shifted by about 30%. Radio: We are just now implementing customer-based radio buying. Social media: This is now getting a content overhaul. We’re testing regional messaging. We’re gearing up measurement to provide better weight and mix reporting. We hope to utilize predictive analytics soon on all social media campaigns. Direct mail: Rented lists have been eliminated and replaced with lists made from our own customer database. We’re beginning to test the predictive analytics software against DM list building options. Email: We snail mail less and are better aligned to product purchase frequency. As a result, our costs are down 25%. Email targeting is now based on customer profile, segmentation, business objective, location (customer and store) and weather. Response rates have doubled and tripled as a result. Improving site traffic and user experience: We have made our

*This series identifies and explains the steps one hypothetical chain has undertaken to evolve their advertising and communication in a mixed media environment. Most of the information described as well as the results are drawn from actual initiatives with most initiated and led by CustomerLink. Prior articles covered Strategy and Planning and the forthcoming on article on Measurement is the final one in the series. For more information contact Alec Paterson at 416-221-5055 or apateson@customerlink-mis.com. Alec Paterson is the managing director at

CustomerLink which has been operating in Canada and the U.S. for over 20 years. The company started with a heavy focus on measurement for every form of print communication and has expanded into most forms of media and consumer communication. To date they have measured over six billion consumer transactions and have evolved to become media and consumer data specialists, software developers, supply chain managers and consultants to some of the county’s largest retail organizations and media groups. Lynne Hoppen has more than 25 years of experience “making the complex simple” for Fortune 500 companies, not-for-profits and government agencies. From launching an employee program to creating a national ad campaign from the ground up, Lynne’s specialty is building emotional connections to brands. Lynne is co-founder and editor-in-chief at Hope & Hoppen Design + Communications, a newly branded Toronto-based marketing agency. DMN.ca ❰

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Targeting & Acquisition

If you build it, will they buy? The importance of a customer-centric e-commerce strategy By Leigh-Ann Clarke


here will be 1.32 billion—yes billion—digital buyers across the globe in 2016. This is up a staggering 60% from 2013, as more B2B and B2C shoppers direct their spending ❱ DMN.ca

to e-commerce sites like Amazon, eBay, Rakuten and Alibaba. And while there are dominant online players around the world that deliver solely online revenue, there are also business behemoths like Apple, Walmart, Staples, Sears and Macy’s that have effectively combined their bricks-and-

mortar business with their online sales to deliver a diversified revenue mix. “Opening your doors to feed the growing appetite of online shoppers does not necessarily mean you’ll be

successful,” says Stuart Lewis, president and CEO of 360 Leads. “Aside from having a product or service that somebody actually wants to buy, there are a number of factors that can November 2015

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Targeting & Acquisition

make the online purchase experience a winning transaction for both the buyer and seller.” Lewis, whose company serves a blue-chip client base across North America and Australia, cites customer research and precise targeting as the most critical elements in delivering an effective e-commerce strategy. “Identifying who your customer really is, executing an effective channel strategy to reach them and then presenting your products or services in accordance with your buyer’s preferences will yield a much greater return than a less focused approach to marketing.” Lewis adds, “Companies need to be honest with themselves about their business strategy and their place in the market. An e-commerce strategy should be exactly that—a strategy, versus simply an online shopping cart.” An area where online purchasing is extremely prevalent is the IT sector. And with the rapid changes in technology, purchasing patterns shift at the same rapid pace. In 2010, only 1.2% of the world’s population used a tablet. In 2014, that number was up to 20.7%. Trevor Dantas, VP marketing for the digital products group at Toshiba Canada knows all too well about market shifts and the need to offer first-in-the-world-type products like the Toshiba Portégé. Dantas says that to drive conversion rates you need to really focus on delivering a spectacular user experience. “As marketers, we tend to focus too much on what we want to say or how we want it to look. It’s not about us, it’s about our customers and making sure they have a positive experience on our website that will lead to a sale.” Gray Tools, Canada’s preeminent hand tools for the industrial mechanic, also offers an online shopping experience. Marketing Manager Frank Dominguez believes that “effective online selling relies heavily on trust since there is no physical interaction between the consumer and the product. It is imperative that the consumer trusts that our company will deliver on the product being offered.” Site stickiness is key to ensuring the shopper completes the transaction and Dominguez is adamant about the integrity of the process. “It’s about secure payment options, a clear shipping policy and a design that looks professional and allows users to find products quickly. Consumers dislike November 2015

negative shopping experiences such as hidden fees, back orders or images and descriptions that do not accurately reflect the product.”

online seller, with an important factor being to build trust with the buyer. “When a customer is making an online purchase, especially from a lesser

“It’s not about us, it’s about our customers and making sure they have a positive experience on our website.” A major consideration for Gray’s e-commerce strategy is to manage any channel conflict in terms of offers, pricing and availability. Gray Tools mirrors its featured products, product bundles and special offers to those offered through their traditional channel. This ensures they have uniform offers and eliminates possible channel conflict. Dantas believes that you can also offer different choices in different channels and tailor-make your bundling to different types of buyers. “Toshiba uses various analytics tools to determine which pages, products and promotions are getting the most hits, and where the traffic is coming from. Knowing what’s successful and what isn’t helps us optimize our efforts as we go along, so we’re not just shooting in the dark. The beauty of digital marketing is that everything can be measured, giving us the data to make informed decisions and demonstrate the ROI of our choices.” Forty per cent of worldwide internet users have purchased products and goods through their desktop, mobile, tablet or other devices. This is more than one billion online buyers and is projected to grow. But one major factor e-retailers need to consider are the devices being used to make their purchases. Dantas feels “the number one priority for all e-stores right now should be mobile optimization. More and more people are researching and shopping using their mobile devices, many of which we actually sell them. If your website is not mobile friendly, you’re already losing prospects and you may not even know it.” Stuart Lewis, whose clients at 360 Leads include Toshiba and Gray Tools, recognizes there are many factors that make a company a successful

known brand, everything needs to focus on building the most positive user experience. They best way to avoid shopping cart abandonment is to ensure the customer knows exactly what they are going to get by showing pictures, videos and compelling product copy.” Lewis adds that shopping cart

abandonment can also be managed after the fact through email follow-ups and persistent shopping carts that address comparison shoppers. Dantas agrees, as keeping shoppers from leaving the Toshiba site means providing a great user experience through data-based decision making. “If you make your e-store easy to navigate and provide deals that you know will be attractive to your customers, they’re less likely to leave in search of better options. It comes down to simplicity and knowing your audience.” Leigh-Ann Clarke is director of sales, North America for 360 Leads. She has been with 360 Leads since 2014, following her progressive management career at Yellow Pages Group where she led their sales efforts in digital products, print, telephone sales and neighbourhood directories.

DMN.ca ❰

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Engagement & Analytics

Unleashing the power of e-commerce How a smart e-commerce strategy helped a Canadian fitness wearable manufacturer take on the world By Rob Stocks


he wearable technology market is experiencing a gold rush. Goliaths like Apple, Samsung and Fitbit have been aggressively pursuing this category. And yet, there is a mid-sized company in Vancouver producing fitness watches and wristbands that, since 2012, has been growing at close to 100% year-overyear—growth that has been supported by a powerful e-commerce strategy. In our 20 years of producing e-commerce websites, ideaLEVER has partnered with many successful companies across North America, but few have launched themselves into the global marketplace as aggressively and successfully as Mio Global (mioglobal.com). Mio is a leading-edge Canadian brand manufacturer that has fully leveraged technology in the pursuit of international growth. Holding five patents in heartrate-monitoring technology, innovation is the foundation of its success. Radiating outward from their core technology is a robust digital strategy that connects their industry-leading product with consumers around the world. And at the hub of that strategy is a sophisticated e-commerce platform that enables Mio to showcase its products and brand story, sell products directly to consumers internationally and orchestrate logistics. Mio, which CEO Liz Dickinson founded in 1999, has embraced e-commerce since day one. “E-commerce has always been important for us since we started,” she says. “Retail ❱ DMN.ca

has been the primary channel, but e-commerce has become more important as it has become more sophisticated, with tools that allow us to optimize, target, upsell and do a lot more behavioural assessment.” Collaborating, not competing, with retailers The strategic decision (which vexes many manufacturers) of whether or not to compete against their retailers by selling online was made early by Dickinson. “From day one we were selling online,” she says. “It wasn’t as sophisticated as it is today, but we made that decision early. “There has never been any pushback from our retailers because we are very careful about our pricing. As long as we retain pricing parity, our retailers are not upset by us selling online. Where it does get bothersome is if we are at a lower price online than our retailers.” In fact, many retailers appreciate the support Mio provides through their website. “Having our e-comm platform is really important because the first place people go is to the website to learn more about the brand, the product and the technology,” Dickinson says. “Then they start to do price comparisons and go to retailers. We have a powerful store locator on our site so we make it easy for people to shop at their preferred store nearby. It’s also helpful that people who bought our product through a retailer can go to our website and get customer support. So in this sense, our retail partners see the website as an ally as opposed to a competitor.” November 2015

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Engagement & Analytics Mio’s story started in 1998 when Dickinson was a vice president at a Telus-IBM subsidiary. As an executive with a family, Dickinson was pressed for time and needed to make her workouts as efficient as possible. She did a little research and became convinced that the key to getting the most out of her workouts was to continuously monitor her heart rate, but back then there were no fitness watches on the market that performed this function. Dickinson recognized the opportunity of this unmet need. In her spare time she developed a prototype, which she took to a number of trade shows. At one, she connected with QVC, the shopping channel, which eventually became her first customer. From 1999 to 2011 Mio grew organically at 10–15% a year. During that time Dickinson kept hunting for what she considered the holy grail of heart rate monitoring. “All through those years I was searching for a way to accurately measure a continuous heart rate from the wrist,” she says. “Nobody else had this technology and if we developed it we would have a tremendous advantage.” In 2011, in partnership with Philips, Mio reached the holy grail and introduced Mio ALPHA as the world’s first performance-level heart rate sport watch to provide continuous accurate heart rate monitoring without a chest strap. “We funded the development of the continuous-heart-rate technology with a Kickstarter program,” she says. “We were one of the first companies in Canada to do this and we raised $370,000. Once Mio became established as the gold standard for continuous heart rate monitoring, things really took off. We offered EKG-accurate heart rate data taken on the wrist that could be used by athletes even during the most rigorous training. This was a huge breakthrough—before that athletes had to rely on chest straps which were impractical and uncomfortable. “We do everything around heart rate and we do it really well. Our competitors do all sorts of other things and they sort of throw heart rate in incidentally. “My view is that heart rate is the most important metric and we have perfected the usage and implementation of heart rate into a wearable. And that’s shown by reviews that compare other brands of smart watches and fitness trackers to November 2015

Mio and we are considered the gold standard in heart rate.” With capital in hand—and a powerful differentiated market position—Mio (which has 50 employees and is growing quickly) was ready to take things to the next level. One of their first priorities was to build out their digital assets.

A direct link from manufacturer to customer There are obvious reasons why you would want to sell online as a retailer. But Dickinson realized early on that there are even more compelling reasons to engage in e-commerce as a manufacturer. Despite the fact that 10% of Mio’s revenue (a figure which has increased significantly and continues to grow) is derived from online sales, e-commerce provides many other dividends. First, there are better margins. Every unit Mio sells online is at retail price. Ninety per cent of Mio’s revenue is derived from their retail partners, from whom Mio gets paid in wholesale pricing. Contrast that with each unit sold online at retail price, essentially doubling their margin. And the profit gets even fatter when you take into account how the Canadian dollar has fallen against other currencies, especially the U.S. dollar, in the past three years. Second, retail shelf space is shrinking. The global retreat of big box retailers has been swift and precipitous. “The traditional brick and mortar retailer is starting to focus on the few brands that produce turn for them—there’s a lot of consolidation,” says Dickinson. “I’m not sure where the future of retail is heading.” Third, a direct channel with your customer provides innumerable marketing benefits. Among them: ❯❯ A direct conversation with your customer enhances brand loyalty by keeping your company top of mind;



By communicating directly on your digital platform, you can collect data about your customer that would otherwise be difficult to acquire; and From those conversations with your customers you can gain key insights that can lead to enhancements in product development.

A three-pronged growth strategy There were three components of their growth strategy: a logistical network to move product, a bold marketing plan to drive engagement and a robust e-commerce platform that could synchronize all the moving parts. With production of product in China and a global retail network, Mio needed a logistical infrastructure that would deliver a great customer experience for both their retailers and their e-commerce customers. They did not have the internal resources to set up this system, so they contracted a third-party logistics company, Shipwire, to handle the fulfillment for them. With Shipwire, Mio has set up international distribution centres in Canada, the United Kingdom, the United States and Asia—enabling them to deliver their watches to their global customers in a timely fashion. Mio’s marketing strategy is spread out across many mediums with a strong emphasis on social media. “Two years ago we had a nearly nonexistent Facebook presence,” says Dickinson. “And today we have 75,000 Facebook fans. The key for us was to hire a full-time person to manage those digital assets.” In addition to in-house staff, Mio outsources its paid search to a third-party firm. Mio’s digital marketing creates a powerful symbiosis with their traditional marketing, which includes public relations, event sponsorship, trade shows and co-op marketing with their retailers. And all of these elements needed to

be woven into a powerful, yet flexible, e-commerce system. In order to realize their global aspirations, Mio needed a platform that could sell in multiple languages and currencies. And an added degree of difficulty was to create an experience for the site visitor where she felt she was at a domestic website no matter which country she was in. This required that the vendor have a sophisticated knowledge of business rules surrounding multiple payment gateways, multiple currencies and arbitrage prevention. The vendor also needed the programming capability of integrating with Mio’s logistics provider, payment gateways and accounting software. And the final requirement was for that vendor to be able to implement Mio’s design specifications and tell their story. For this very complicated process, Mio chose ideaLEVER. Canadian companies missing e-comm opportunities Mio is a business that is exemplar of a successful Canadian company aggressively pursuing global customers with a well-executed strategy. Unfortunately, that is not typical of the Canadian e-commerce landscape. According to a recent Business Development Bank of Canada (BDC) report, internet retail sales in Canada reached $5.4 billion in 2012 and that number is expected to reach $10 billion by 2020. But despite this incredible opportunity, Canadian companies seem unwilling to enter this space. In 2011 only 18% of Canadian companies were engaged in e-commerce. And less than half of Canadian businesses had a website at all. All this while 69% of online goods purchased by Canadians were from vendors outside of Canada; meaning Canadians purchased only 31% of their online goods through Canadian e-commerce sites. The same BDC study found that Canadian companies selling online increased from 16–18% from 2008 to 2011—but by 2014 that number had dropped to 14%. On the surface, such a regression is strange in light of the opportunities. The reality, however, is that e-commerce is not easy to get right. In our experience there are many businesses with the best of intentions to sell online who lack a realistic strategy for success. It is not unusual for us to be Continued on page 12 DMN.ca ❰

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Operations & Logistics

E-commerce for small growing service businesses By Paul Austin-Menear


ost business owners think of e-commerce in the most common use case—augmenting or replacing brick and mortar with online retailing. Canadian companies like Shopify and Tulip Retail are betting big and jockeying to be the trusted provider that guides brick and mortar establishments into the modern omnichannel marketplace. In 2012, Parliament’s Standing Committee on Science, Information and Technology commissioned a study to look at the adoption of e-commerce technologies by Canadian businesses. The study found that our small to medium enterprises lagged behind those in the U.S. by a significant margin. The most commonly cited challenge behind moving business online was the complexity and cost of integrating modern point-of-order and point-of-processing technologies with aging inventory and fulfillment systems. It’s a fair concern—having worked on these integrations, I know firsthand what a nightmare it can be to drive a square peg through a pinhole. E-commerce is much bigger than selling physical (or digital) goods online, though. The broad definition of electronic commerce used in the information, communications and technology (ICT) community qualifies nearly anything that leverages a web-based technology to facilitate transactions as “electronic commerce.” Products are really just services you can touch A service is usually thought of as something that humans do for other ❱ DMN.ca

humans to fulfill a want or need. A product is something that a consumer buys which is used to then fulfill a want or need for themselves or someone else. The product is the power drill; the service is the contractor who comes with their own drill. In technology, the distinction between product and service has been eroding for several years. Software and infrastructure were mostly considered products, but now are also being delivered as services. This erosion in how we differentiate between products and services is similar to the erosion between features and benefits that afflicts many marketers. When buying the power drill, is it the features of the drill that really matter? Speed, torque, number of gears—they’re all dimensions that when added together suggest what kind of outcome (benefit) a customer can create with the drill. The features don’t really matter beyond this description of a future benefit. When viewed through this lens, a product begins to look like a service with an extra step. Like products, services can also be transacted through e-commerce. In many ways, growing businesses that provide services can more easily adopt e-commerce than those that provide products. Unlike their product-based counterparts, service organizations tend not to have rigid inventory and fulfillment systems. The natural comment many servicebased business owners have about e-commerce is: I don’t do business based on volume, I do business based on time. What I have is working fine. Why should I add more complexity to

my business? It’s reasonable question. Here’s the answer: Purchase friction has a direct impact on sales and retention— though the effect on your business is difficult to quantify unless you routinely collect customer feedback. As a service business, your purpose is to simplify or fulfill a customer want or need. Customers touch your brand and your organization beyond the delivery cycle of your services—order taking and billing are important touchpoints, as they directly impact how easy it is to do business with you. If paying you is a headache, you’ll eventually start to lose customers to competitors who better manage these touchpoints. If you’re skeptical, poll 10 random people nearby. I’d wager you’ll find at least one who has changed phone or cable providers due to a poor billing experience. Improving customer experience through e-commerce Life is more complex today than it was 20 years ago, just as it will be more complex in 20 years than today. Many people are actively looking to simplify their lives, and the market is responding to this want by creating new ventures oriented around doing just that. Web-based businesses are springing up around everything from taking out the trash (TrashDay.co) to hailing a cab (Uber) to doing your own taxes (TurboTax). These new businesses all have two key things in common: they’re designed to improve a sub-par experience and payment is so seamless it’s almost unnoticeable. When analyzing a customer

experience touchpoint, there are five critical dimensions that should always be evaluated: speed, simplicity, convenience, consistency and certainty. How do your customers currently pay for your services? How would the experience your customers have while paying stack up against these five critical dimensions? Mailing a cheque or money order: This one almost always fails in speed, consistency and certainty. It takes a few days for the cheque to arrive and a few more for it to clear (which it might not, unless it’s certified). Over the phone: Paying by credit card over the phone often fails in consistency. Language barriers and accents cause frustration. Humans also just have bad days and get cranky sometimes (customers and reps alike—it takes two to tango, after all). In person: Cash, debit, credit—they all involve the customer travelling to you. More often than not, also waiting in a line with all the other humans who dropped by to give you money. This experience frequently suffers failures in speed (waiting in line), convenience (making a special trip) and consistency (language and mood). Barter: A failure of simplicity and certainty, almost every time. And likely why our distant ancestors dreamed up the notion of currency in the first place. Moving on… E-commerce: A properly designed e-commerce touchpoint performs well against all of the above dimensions. Paying online rarely takes more than a few minutes, satisfying speed. Entering credit card information into a secure web page or app screen is November 2015

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Operations & Logistics easy to do, satisfying simplicity. Not having to leave the home or office to pay satisfies convenience. Human interaction during the process of paying is low and almost always the same as the time before. This satisfies consistency. On-screen confirmations and automatically emailed receipts satisfy certainty. Ready to get started? There are a number of secure, welldesigned, well-supported, affordable tools available that will simplify getting started with e-commerce. When envisioning how it could work for your business, ask yourself these questions: How would my customers place orders? If you’re selling heavily commoditized, standardized service packages at low(ish) cost, an online storefront is likely the best solution. Take a look at Shopify (shopify.ca) or WordPress with WooCommerce (wordpress.org and woocommerce. com). WordPress is just as or more secure than other open-source content management systems when you follow best practices on security and use a reputable managed hosting service for

November 2015

your website. If your services are heavily customized or expensive, your order taking process might not change all that much. But, maybe you’d benefit from a platform to help you streamline deal closing and better manage your contracts. Take a look at Adobe Document Cloud (acrobat.adobe.com). How would I bill my customers? If you decide on an online storefront, this is built in (customers have to pay before the order can be placed). WooCommerce has optional extensions available for recurring billing and managing free trials. If contracts and a multi-step sales process are the norm for your business, there are other options available. The most common is to email your customers a PDF invoice, but let’s face it—this isn’t any more advanced than printing a paper invoice and dropping it in the post box. It doesn’t do anything to streamline operations or improve customer experience. The real billing magic happens when you source a tool that emails customers an invoice you create, but also offers online payment options

and integrates with your accounting software (or replaces it). Check out Freshbooks (freshbooks.com) and Wave Accounting (waveapps.com). Or PayPal—these days, it’s not just for buying trinkets on eBay. How would my customers pay the bill? Most invoicing tools have built-in payment options. The invoicing tool emails your customer the bill, and the message includes a link for them to click in order to pay it online. Freshbooks, Wave Apps and PayPal all take this approach. Also look at Square (square.ca) and Shopify Payments (shopify.ca/ payments). These tools were originally build for online retailing, but can be configured to work for service businesses with a little outside the box thinking. How (and how often) does the money get to my bank account? If you want your own merchant account for payment processing, there are a number of good ones readily available. Gateways like Stripe (stripe.com), Braintree (braintreepayments. com) and Beanstream (beanstream. com) take an aggregated approach to

merchant accounts, which helps bring down the cost of their services. When evaluating these providers, pay close attention to the processing fees and the deposit schedule (usually a rolling two-day or rolling five-day). Final thoughts It’s incredibly important to make change about your customers, not about you. Before getting started, solicit as much customer feedback as possible. What are their pain points? Avoid making changes that will improve your business if these same changes will make the experience for your customers worse. A great way to make sure you’re on the right track is to test changes with a trusted group of customers before rolling them out to everyone else. Paul W. Austin-Menear is an experienced marketer and consultant who specializes in creating rich multichannel experiences that leverage marketing automation. Over the last decade, he’s worked with both entrepreneurs and the c-suite to fuel business growth in a variety of industries. Learn more about Paul at menear.ca.

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Industry News

Connected Canadians embrace new trend: Commuter commerce A new benchmark study from PayPal Canada and Ipsos reveals that Commuter Commerce, a new shopping behaviour where people shop from their mobile phones while on public transport, is a new retail trend in Canada. Today, 14% of mobile connected commuters shop while in transit and three in four Canadians (76%) would consider buying a wide range of products if mobile shopping options were easily available. Those engaged in commuter commerce spend an average of $529 per month per person buying a range of items from movie tickets to clothing, shoes and accessories. With 4G LTE cellphone connectivity on buses, streetcars and aboveground trains and more Wi-Fi options on public transport, PayPal Canada predicts that commuter commerce is poised for growth over the 2015 year-end holiday season and beyond. “We work with a wide range of retailers to provide mobile-friendly shopping experiences for Canadians. When paying with PayPal, people don’t need to enter shipping and billing details to shop from their phones on a crowded streetcar; which is a great fit for commuters,” said Kerry Reynolds, head of consumer marketing, PayPal Canada. “PayPal predicts that whether it’s gifts or groceries, commuter commerce will boom in Canada as savvy commuters use their time efficiently to shop from their smartphone while on the move.”

Shop between stops—commuter commerce catches on in Canada Mobile connected commuters who have shopped while using public transport report buying movie, game or concert tickets (62%), clothing, shoes or accessories (62%), gifts for family and friends (55%), food and groceries (53%), games, gadgets and tech accessories (50%) and furniture and home décor (37%). The future of commuter commerce is bright. Seven out of 10 (71%) connected commuters agree that they would like to browse their favourite stores on their phones during their commute, while almost the same number (69%) agree that they would like to shop securely while commuting because it is a big time saver. Four in 10 (43%) connected commuters would consider buying gifts for family and friends, while others would consider buying clothing, shoes and accessories (42%), movie, game or concert tickets (41%), electronics, games and tech accessories (37%), groceries or food for home delivery or pick-up (30%), or home furniture or décor (27%). Given the spread between current commuter commerce users and those receptive to it, the proportion of active commuter commerce users could increase five-fold if mobile shopping options while commuting were easily available. When asked, what is holding them back from shopping while commuting nearly half (45%) of connected commuters said poor or limited cellphone reception and the lack of Wi-Fi on public transport were major deterrents. Four out of 10 said they were worried about security or sharing their credit card details.

To send press announcements, please direct them to Sarah O’Connor, Editor, at sarah@dmn.ca

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Unleashing the power of e-commerce Continued from page 9

approached by a company with a $20,000 budget and the expectation of making their website work “like Amazon.com,” which at the very least is a $1 billion website. Another deficiency we regularly encounter is the failure to budget beyond the website itself. No matter what platform you choose— whether it’s Shopify, Magento or CommerceCM—the cost of the site development is only the first expense. We counsel our clients to budget at least three times—in either time or money—the cost of the website to allocate to content, search engine optimization and online advertising. And you must be prepared to continually invest in your digital assets. Mio engaged in a large upgrade to their website twoand-half years ago. Then just last month they launched a significant redesign. For those new to the e-commerce world, we highly recommend your first step be to consult with a reputable developer. An experienced company, with knowledge of the many e-commerce trap doors, will pay for themselves many times over. The velocity of change in the online world means even the most experienced vendors are on an education journey with their clients. Dickinson considers the process of e-commerce a classroom in which her team is constantly learning. “The most important thing we’ve learned is how to refine the supply chain,” she says. “You can stimulate demand and you can fulfill it, but if you don’t have all the processes down it’s very frustrating for the consumers. “Little things, like acknowledging that your customer has placed the order, are extremely important. Acknowledging the fact that the order has shipped. Giving them a tracking number so that they don’t feel they have to contact you to find out the tracking number. Make sure you test and test the whole logistical process. We learned this the hard way.” At the end of the day, Dickinson believes that an optimal e-commerce experience is simply an extension of a company’s core values.

“We used to outsource our customer service,” she says, “but it’s such a fundamental part of our branding that we don’t do that anymore. You only outsource things that aren’t core to your business. Customer service is so core that it has to be insourced. It’s part of our branding that reports to marketing.” Mio’s industry-leading brand and products are well suited for international sales and it is moving aggressively into the global marketplace. Canada, with its population of 35 million strung out across 5,000 kilometers, is not always the ideal e-commerce landscape. But there are incredible opportunities to sell internationally. Opportunity abounds abroad A recent AT Kearny report on Global E-tail, ranks Canada 11th in Online Market Attractiveness. Number one and three are the United States and the United Kingdom, respectively. The ranking is weighted for market size, consumer behaviour, market potential and infrastructure. The same report projects global e-commerce sales set to increase from $1 trillion in 2015 to $1.5 trillion in just three years. And it cites U.S. house wares retailer Williams–Sonoma’s success as evidence of the reward in global markets: as of 2014 WilliamsSonoma sells online in more than 100 countries and online sales account for more than 44% of its total revenue. And from Liz Dickinson, these final words for those contemplating selling online: “If you’re a Canadian manufacturer, I would advise you to get into e-commerce as soon as possible, if you’re not already. If you don’t have your own channel to the consumer, you’re going to be left behind.” Rob Stocks is the founder and president of ideaLEVER Solutions, a B.C.-based web and e-commerce development company that partners with clients across North America. For more than 20 years, ideaLEVER.com has helped entrepreneurial organizations grow their revenue with powerful and innovative online solutions. November 2015




• Non-profits as leaders in innovation? • The race to the bottom • Neuromarketing insights for fundraisers • Practical multivariate testing for direct mail fundraising campaigns

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Non-profits as leaders in innovation? By Gayle Goossen


t’s not often you see the words “innovation” and “non-profit” in the same sentence, but the environment in which non-profits find themselves is ripe for innovation: tight budgets, great talent and inspiring need. First of all, let’s dispel the notion that non-profits are, well, not-for-profit. Unlike the for-profit sector, non-profits’ role is to make as much profit as possible and then distribute that profit to their owners—society. As a societal shareholder, I want to see my non-profits contribute with professionalism and effectiveness. It’s a misnomer to believe that non-profits should work on shoestring budgets with low-paid staff working on hand-me-down computers and sitting on mismatched, slightly malfunctioning chairs. Those working for social good should be industry leaders, using strategies of communication, marketing and testing that meet stated goals. The role of the non-profit is to generate greater good. To generate greater good there needs to be an underlying source of funding—believing that is done by happenstance and benevolence is naïve. We often dream about doing a truly innovative ❱ DMN.ca

campaign—like the Share a Coke Tour (custom product kiosks), Dove’s You are Beautiful Campaign (unlimited appeal) or the infamous Apple/PC ads. But non-profits have been leaders: Movember, Dumb Ways to Die and UNICEF’s Tap project have all won awards for innovation, competing alongside forprofit campaigns. Non-profits too often lament the lack of budget, rather than focus on what really matters: communication that truly connects with the audience. Innovation always begins with a problem. In my experience, non-profits today are experiencing three critical problems: 1. An aging population forcing a dramatic shift in audience and values; 2. Increased competition and, with that, increasingly sophisticated content: while direct mail and door-todoor still have relevance, results are decreasing; and 3. Disruption in the communication environment. Technology changes everything: the way we think, the way we engage with one another, the way we market. We’re still learning how to use technology effectively. In sharing my experiences with other non-profit leaders, I see varying degrees of innovation. While some boards may be pressing their non-profit team

to “come up with” (innovate) the next Ice Bucket challenge, others understand that innovation (read: progressive change) may be experienced in incremental steps. There may have been several “ah-ha” moments along the way that contributed to new and innovative approaches to multiple facets of the marketing and fund development teams. Those collective steps may seem insignificant, but together they are change-makers. Truly innovative marketing has little to do with budget. A tight budget may, in fact, develop a stronger and more compelling campaign. Innovative marketing starts with a problem and uses imagination within the confines of the resources available to develop a solution. Seth Godin, in Purple Cow: Transform Your Business By Being Remarkable, urges companies to resist boring mass marketing that is repetitive and begin to separate from the herd and be “remarkable.” Shouldn’t a non-profit be remarkable? After all, they are doing heroic, courageous things within our world. And they have the power to invite ordinary people to come alongside and join them. It’s more difficult than expected. Too many times non-profits chase “what works” for other organizations. Putting five greeting cards, a pen and stickers into a label package is not innovative or November 2015

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Innovative marketing starts with a problem and uses imagination within the confines of the resources available to develop a solution. movement even in the early days before the masses caught on. The ALS Ice Bucket Challenge was a similar innovative and inventive moment, raising over $100 million in a few short weeks. But unlike Movember, the Ice Bucket Challenge was a one-off peer-to-peer viral campaign—a little like winning the lottery for ALS. Movember, on the other hand, is a focused and sustained campaign. Non-profit leaders are watching it closely to see if the numbers decline (and I imagine they will) because it is a campaign, like Dove Beauty and Coke. The leaders will have to continuously reinvent the campaign to catch the attention of their audience. But no matter what the future holds, an 11-year run raising over $700 million is a great campaign. While many non-profits wish for a quick, cashrich campaign like Movember or the Ice Bucket Challenge, truly innovative non-profits must put their imaginations to work to develop campaigns and products that build long-term loyalty among donors.

Amanda Palmer, a musician who uses crowd funding in a big way, uses extremely creative social media, events and web tactics to increase her ability to fund through crowds. She does not simply post and rely on the public to find her. Her insights for raising funds are inspiring. She says “with busking, as with crowd funding, asking is the relationship. The trust and humility created by the artist with their hat out on the street and the generosity of the person tossing in their coin are all part of the art form.” One of her most insightful observations was that she noticed that there were thousands of people who were just waiting to become a part of something that was much bigger than they were. Joining her on her journey to produce art resonated with them. Amanda Palmer stood out. She did things no other artist had ever considered. She dared to change the paradigm. Aldous Huxley wrote: “The vast majority of human beings dislike and even actually dread all notions with which they are not familiar… Hence it comes about that at their first appearance innovators have generally been persecuted and always derided as fools and madmen.” So let’s cause a little trouble. What do you think defines innovation? Gayle Goossen is partner and creative director

brand centric. While the response of that package may make sense in the short term, the donors are neither loyalty driven or sustainable for the long term. I wonder if the package is done again and again and again because it is cost effective and driven by a direct response method unconcerned about brand or, for that matter, long-term loyalty. There are innovative campaigns that are working. Movember is one of them. Last year Movember raised $24 million for prostate cancer in Canada alone. Over the past 11 years the campaign has raised almost $700 million dollars worldwide. What can we learn from this? There is immense power in a movement that captures the imagination of men and women around the world. It started with a good cause, a cause that was a little uncomfortable to talk about. A simple fundraising model was added to the good cause. The idea was simple, attractive and caught the attention of people worldwide. But it didn’t start at millions of dollars. It started small and grew strategically, taking advantage of web, social media and playfulness. Core to sustaining the success of Movember were key media personalities coming alongside, corporations paying attention and ordinary people participating. It is a mass movement. The innovators behind the campaign were tenacious, maintaining November 2015

Case study: Donor’s Choose Donor’s Choose, a U.S. web portal, invites teachers to request items they need from the general public. The site celebrates crowd funding. Donors can choose to provide a classroom tickets to the local museum, an art program, books for the library—the requests are broad and often inventive. The site was launched in 2003. To date, it has raised almost $370 million for over 640,000 projects. The idea behind the site is simple—teachers (the direct beneficiary) tell the public (the donor) what they need and why. The transaction takes place online, taking advantage of a huge reach. Donors can give a few dollars or provide the funds for the whole project. This kind of crowd funding is raising eyebrows from coast to coast. The idea is inspired by KickStarter, a funding site for entrepreneurs.

at Barefoot Creative.


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The race to the

bottom Resisting the corrosive effect of strictly cost-based NFP rankings

By Bruce MacDonald

One useful way to think of quantitative indicators is that they are technologies of simplification, strategies that make complex process visible and easy to grasp, and make comparisons—across people, organizations or time—easy. This simplification is both why we value indicators so much and why we often feel they misrepresent us. —Richard Rottenburg and Sally Engle Merry, A world of indicators: the making of governmental knowledge through quantification


oday’s open sourced world is fraught with challenges. With unprecedented access to information, any person, company or organization can publicly comment on their interpretation of a charity’s “performance.” The leaders of charities and non-profits struggle with both participating in and condemning attempts to compare and quantify. And yet, the popularity of quantified ratings and rankings continues to grow. In the charity world, reputation and trust are everything. Most organizations are not selling products and services and therefore rely on the goodwill of donors and sponsors for the revenue that will allow the good work of the organization to ❱ DMN.ca

November 2015

take place. For this reason, charitable organizations are predictably sensitive to how they are publicly portrayed. As society looks at charitable organizations, there are a number of paradoxes and tensions embedded in the issue of quantitative indicators. These are complex questions, ones that invite discussion and comment but rarely have clear cut answers. How can not-for-profit sector organizations meet the demand for short, quantifiable, comparable information without threatening in-depth engagement with supporters by appearing one dimensional? It is clear that the demand for easily consumable information is not going away any time in the near future. Various rankings and ratings methodologies continue to frustrate the leaders of organizations as it is widely felt that the grades are measuring the wrong things. Combine the belief that rankings are missing the mark with the fact that they generally come with significant media exposure and there is a feeling of helplessness for any organization that is ranked. For sector leaders, good rankings are bittersweet as even good scores work, in the long term, to reinforce the message that the worth of a charity is solely based on cost. At the heart of the relationship between causes, donors and volunteers is trust. That trust is built through the delivery of quality services, openness and transparency and a belief that the organizations are working on behalf of the public good. In recent years, however, signs of weakness have started to show in trust ratings. The Edmonton-based Muttart Foundation has produced a regular market research report that asks Canadians about their perceptions of the sector. The Talking About Charities Report 2013 has a number of key learnings that include: ❯❯ The results of phone interviews with almost 4,000 people show overall high levels of trust for Canadian charities. But some of the data demonstrate that this trust is fragile, particularly for certain types of charities. The data also suggest that Canadians’ levels of trust in other types of organizations have diminished over the 13-year history of these reports. ❯❯ Canadians say that charities need to make significant improvements in how they tell the story of their work and its effect on the country. In other areas, Canadians indicate support for expanding the role of charities in Canadian society. November 2015

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For sector leaders, good rankings are bittersweet as even good scores work, in the long term, to reinforce the message that the worth of a charity is solely based on cost. The idea of ‘telling the story’ seems counter intuitive to ultra-easy rankings. While charities seek to engage and build relationships with donors, rankings and ratings that perpetuate the belief of cost being the overriding consideration of an organization’s worth work in the opposite way. They feed a desire for instantaneous information in a realm where understanding the needs of donors and volunteers takes time.

that agonize over participating in rankings exercises. It seems that somewhere in the conversation, the idea that an organization may refuse to participate because of a matter of principle (not agreeing with the ranking methodology) became unacceptable and, in fact, is viewed as a lack of transparency—a very difficult spot for boards for directors and senior staff to find themselves in.

How can organizations work to reframe or stop rankings when the celebration of scores perpetuates the belief that rankings are a public service? For years, charities and non-profits have been referred to as the Third Sector. For some reason, despite the fact that two million Canadians are employed in this sector, 13 million people participate in this sector through volunteer work and this sector is a contributor of eight per cent of gross domestic product, the perception exists that the charitable and non-profit sector is somehow of less value than government or the private sector. It is my personal opinion that this perception, combined with organizations being chronically underfunded, has created a societal belief that while nice, sector organizations are not viewed with the same level of professionalism. Nowhere is this more evident than when external validation is provided to organizations—even when it is measuring the wrong things! Yes, I have a bias. I believe that the current major rankings and ratings publications are doing a disservice to charities by only measuring cost. It is therefore challenging to see organizations who are seeking to demonstrate value and impact champion the results of good scores to donors and supporters. I do, however, understand why. This external acknowledgement of best practice can assist in demonstrating worth to prospective donors and volunteers. Charity leaders are stuck. To resist the temptation to publicize good scores is difficult. At the same time, widespread communication furthers the belief that these scores are a public service. Again, I simply don’t agree that examining only certain areas of the business based on arbitrarily chosen metrics is a public service. In addition, I feel for organizations

How can the sector realistically shift the emphasis from cost to impact when so few organizations can produce evaluation and impact studies? It would be unfair to characterize rankings and ratings as the root of all the sector’s ailments. At a fundamental level, charitable organizations want to improve the lives of the people they serve. That is why they were started in the first place—to make communities better. Society has been making a profound shift over the past couple of decades to one that seeks to better understand the difference being made by the service offerings of organizations. There has been a strong positive move away from understanding outputs (i.e. 500 children took part in a reading program) to outcomes (i.e. as a result of participating in the reading program, the children did better in school). It is my observation that most organizations have accepted this shift and would be willing participants in regular, ongoing evaluation of their programs, but are having difficulty overcoming a few key barriers. These include a lack of evaluation expertise, the difficulty of having impact assessment included in funding proposals and concerns about uncovering less than stellar performance. Overcoming these barriers and creating a culture of evaluation and impact assessment will be critical for charitable organizations to contribute to a reframed narrative with Canadians. Bruce MacDonald is president and CEO of Imagine Canada.

Previously he served as CEO of Big Brothers Big Sisters of Canada for 10 years and prior to that as the organization’s vicepresident of marketing. Bruce holds a Bachelor of Commerce in Sports Administration and a Masters in Management in the Voluntary Sector. DMN.ca ❰

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Neuromarketing study participants wear full-head EEG headsets and mobile eye tracking glasses, which are integrated in real time. This allows researchers to know where people are looking and how they are feeling.

Neuromarketing insights for fundraisers By Sarah O’Connor


irect mail is a fundraising standby, and rightly so. Neuromarketing research suggests that personalized mail is the best medium through which to deliver emotional messages and inspire action (see sidebar). Diana Lucaci, CEO and founder of neuromarketing firm True Impact Marketing has the following advice for fundraisers: Elicit emotion but don’t overwhelm “What I find working with nonprofits is that you want to elicit the right amount of emotion because the moment you tell somebody about a situation in some part of the world and you’re requesting funds to help those people and you show imagery of those people the images are so hard to see that your heart just hurts. You’re actually creating the opposite effect

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[than you want], because a lot of people turn away. They either can’t handle it or they’re not in the right space for it—it’s really difficult. “You can’t have happy images because that’s not going to trigger an action, but you can have imagery that is too depressing. You need to find the balance between enough negative imagery that it triggers an emotional response but then quickly flip it to: here’s what you could do, here’s how life could be better. Focus on the solution and end on a high note is what we found is the right sequence for a message like that. [Campaigns] that follow this structure tend to perform better because ending on a high note is directly correlated with in-market activity and what I mean by that is ending on a high-engagement mental motivation and engagement.”

“When it comes to creating a message, don’t focus on the technology— focus on the biology.” Diana Lucaci, CEO and founder of neuromarketing firm True Impact Marketing. November 2015

Sometimes age is just a number Lucaci reminds fundraisers to relate to people based on their values rather than their demographic profile. Keep this in mind when looking for new donors and segment prospects based on values wherever and however possible. “When it comes to testing different mediums, such as print versus digital, we did not notice any significant age differences. What that is saying is in line with many other studies that have been published recently. A lot of people are realizing that Millennials are not a separate entity or different animal that we can’t decode. Our brains are wired the exact same way. At the core of our human nature we all have the same needs—security, safety, belonging and so on. What are different between generations are the areas in which they are interested in.” Though they may not have as much disposal income as their older counterparts, Millennials and Generation Y still support causes they believe in and feel strongly about. “What is important is aligning with the values of that generation, not necessarily the channel. The channel of communication, print or digital, that has a very similar impact on the brain of a Baby Boomer as it does on a Gen Yer. People need to think outside the generational box and look at—what is this person’s digital fluency? And beyond that, what are the issues that matter to each generation? Many causes affect all generations, directly or indirectly. It’s about catering your message to that generation and tying it in in order to create something that is relevant to them.” Stay focused on the positive “One reason we have survived as a species, as homo sapiens, is that we are completely, blindly hopeful about tomorrow. We feel that things will get better, because otherwise you might not get out of bed in the morning. As a species, as an animal, we are designed to think about progress and the future and just hope that our kids tomorrow will have a better life than we did. So when it comes to creating a message, don’t focus on the technology, focus on the biology. You do that by showing progress and identifying that here’s a challenge and yes, things are really bad right now. Can you do anything? Yes, you can. You’re not insignificant; one person can actually make a big impact. Here’s how one person can make a big impact. “Maybe you show a case study from before to after, or you show a huge transformation and the proof behind it. As long as there is that indication of, this is what we are going to do with your dollar. “Fear only works temporarily and I think it affects the brand in the long term if you keep trying to sell on fear. Outline the problem but focus on the solution and how one person can make a big difference. End on a high note.” Consider your copy in context The classic fundraising letter “needs to be put in context and it needs to be viewed through environmental factors. I think direct mail needs to be part of an integrated campaign and guided by an overall strategy.” This allows you to stay connected to donors and get to know them better on an November 2015

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individual basis. Make sure that you are in touch with donors more often than simply asking for money once a year. Look at the context as well as the content. “Sometimes context is more powerful than content because you can have great content that doesn’t stick because it’s just out of place. It’s not congruent with that person’s life and what’s going on around them.” Give them what they want—themselves “When we ran research on how people interact with an envelope and with a letter, we noticed that the fact that its addressed makes a big difference. People love to see their name and address. If the letter is not personalized and it says ‘Dear Madame or Sir’ it usually doesn’t create the same sort of personal engagement. “I highly recommend you either make the name big or you make a sticker with their name or you personalize the heck out of it. If you can get their Facebook picture with their permission and put it on something they get in the mail, they are going to keep it because it has their face on it. People are ‘me me me’ first. Personalization really works and the amount of content needs to be looked at. What is the minimum amount of content that I need to put in this letter that’s going to tell somebody what I need them to do? Is there an extra word in there that’s of no consequence? Do they get what they need to do and is it easy for them to understand? “In our culture, because we read from left to right, I would always recommend starting with an image on the left and then very little content on the right to tie in the message or call to action. I find that is the best layout for somebody to get what it is about and what they need to do.”

“People need to think outside the generational box and look at—what is this person’s digital fluency?” playing.’ And some people liked it and some people didn’t. We saw their brain reacting to it and overall people were more inclined to prefer the version with the sound, they found it more engaging.” When True Impact ran similar tests with scent, participants said that they liked samples with and without scents about the same. “So they didn’t notice a difference, but their brain reacted to it in a huge way. Their brain picked up on that scent. They couldn’t identify what it was, but they had a much better experience with it. “This is a simple enough change or addition or enhancement to a DM piece, much simpler than adding sound. Adding scent is easy enough to do and as long as it’s in line with the message I would put my money on that.”

What is neuromarketing?

Use scents where they make sense True Impact’s research for Canada Post revealed that the effectiveness of direct mail is enhanced dramatically when you can incorporate additional senses as well as sight and touch. This is a very effective tactic for fundraisers if you can find a compelling context. “They have to be correlated or it just makes no sense,” Lucaci acknowledges. “When we test different senses we find that scent is one that people are not consciously aware of but that influences them a whole lot. In tests, people can’t put their finger on it but their brains go crazy for the scented stuff. “We looked at sounds and scent, and when we asked people, ‘did you notice anything different?’ people who got the sound version said, ‘yes, I heard the music

Neuromarketing is the application of neuroscience, a multidisciplinary science devoted to understanding the nervous system, to marketing. It draws on neuroscientific tools like brain imaging to measure consumer responses to marketing stimuli. Canada Post recently partnered with neuromarketing experts True Impact Marketing to understand how and why direct mail still generates results in a digital-dominated world. Their results were published in “A Bias for Action: The neuroscience behind the response-driving power of direct mail,” which is available online. Their findings can be summarized as follows: 1. Direct mail is easier to understand and more memorable then digital media, as it requires 21% less cognitive effort to process and elicits a much higher brand recall. 2. Direct mail is far more persuasive than digital media, as its motivation response is 20% higher or even more when additional senses beyond touch are incorporated. 3. Direct mail is visually processed in less time than digital media. When considered in concert with its higher motivation and lower cognitive load, this suggests it gets the message across faster. 4. Direct mail is more likely to drive behaviours than digital media, surpassing the important motivation-to-cognitiveload ratio threshold of one.

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Practical multivariate testing for direct mail fundraising campaigns By Steve Falk


f you’ve been an attentive student of the art of marketing then you and A/B testing are old friends. The concept of testing theories, measurability and the strategy drawn from the results are probably a big part of the reason I’ve stayed in marketing communications. In online and direct mail, A/B testing delivered results. Proper testing helped guide messaging and design. The only problem was that in print, there was a much higher cost than online. Large scale A/B testing required a significant investment. At least it used to be expensive. When I started in this industry mountains were taller, snow was deeper and print was king. But unless you’ve been living in a hole and your phone still has a rotary dial, you know marketing has been moving more and more resources to online digital communications over the past decade. And whether you recognize the name or not, you’ve been using A/B testing’s cool younger cousin—multivariate testing—ever since you created your first web page. This non-bearded hipster of marketing tests one or more variables on a web page to see what works and what doesn’t. Just think of the endless revisions to web content you’ve implemented based on the response to any of your recent campaigns. If you’ve used Adwords then the principle is also familiar to you. You choose a couple of catchy headings and taglines and Google puts them in front of people to test the click rate. The more interest, the more they display those ads. Your test is conducted automatically by them. For direct marketers and other print campaign specialists, it’s been tough to watch the new kid easily create multiple versions online quickly and ❱ DMN.ca

affordably, finding out what works by examining multiple elements they can switch up or switch out with a click of a mouse. Using multivariate testing, marketing professionals get fast, affordable results that help them take a campaign quickly and (almost) effortlessly from good to great. And as it costs next to nothing to make little changes, corporate bean counters love it. It’s low cost, but what about “results” and “outcomes”? Multivariate testing is no longer just for web pages What those bean counters don’t realize is that there is now a way to do affordable multivariate testing on your print campaigns so that they are closer to the online experience that we’ve all become accustomed to. And, importantly, you will get results and outcomes that are not available online from customers and donors who don’t respond to online messages. There is a reason print and direct mail has been around as long as it has. Simply put, it works. A mailer has a longer lifecycle than an email communication or banner ad. It comes with perceived value that resonates with donors over a longer period of time. Unfortunately, digital has been eating its lunch, with promises of cheap and virtually endless email messaging, programmatic placement of ads and Adwords simplicity. Thanks to improvements in variable data printing, organizations can now take donor information, gathered in-person, online or through gift-giving history, and use that to drive variable data print campaigns that speak more directly to them by switching out text, images and offers in response to data. In essence the print experience now mimics the targeted online experience. But unlike online, the

flyer, postcard or letter you send will actually appear for more than a few seconds on a screen. What this means is an audience is more likely to spend time looking at the information you send, be engaged and respond to your call to action. New technology means you can test… and test… and test Print technology hasn’t just evolved—it’s been reinvented as advanced technology like fast, affordable, full-colour variable inkjet printing. As a direct response to the demand for variable messaging that is seen online, technology like the Canadianmade Delphax élan inkjet printer have made print campaigns more adaptable with a high level of custom messaging based on data. Marketers can now test, test and test again using tangible print marketing materials that stick with donors a lot longer than an email blast or banner ad. So with print and digital competing on the same level, the question for marketers becomes, which is going to resonate with your donor base and send traffic to your online gift-giving portal: an email blast that is likely to be deleted within seconds and where donors can opt-out and you lose them forever, or a tested direct mail campaign that will enjoy a longer life on the kitchen table? The answer is, a bit of both. If you can flag donors with details such as their media channel preferences, all the better and more effective. Without using them both you will leave money on the table Steve Falk is president of Prime Data (winner of the CPC Expert

Partner Award for Growth) and a member of the NAMMU Innovation Committee. Prime Data’s clients benefit by bringing technological innovation and marketing automation together with variable data printing and direct mail. November 2015

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